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QUESTION 1 Complete the following sentences: In insurance markets, ✓ can arise if insurers can't tell high-risk customers from low-risk custo In insurance markets, ✓ can arise if individuals may change their behavior after the insuranc bought, so that they behave in a more high-risk manner than they did before. In labor markets, ✓ can arise if hiring firms can't tell high-skill job-candidates from low-skill jo candidates. In labor markets, ✓ *Select Answer* moral hazard adverse selection can arise if managers can't observe the effort of workers.

QUESTION 1 Complete the following sentences: In insurance markets, ✓ can arise if insurers can't tell high-risk customers from low-risk custo In insurance markets, ✓ can arise if individuals may change their behavior after the insuranc bought, so that they behave in a more high-risk manner than they did before. In labor markets, ✓ can arise if hiring firms can't tell high-skill job-candidates from low-skill jo candidates. In labor markets, ✓ *Select Answer* moral hazard adverse selection can arise if managers can't observe the effort of workers.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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QUESTION 1 Complete the following sentences: In insurance markets, In insurance markets, can arise if insurers can't tell high-risk customers from low-risk custo ✓ can arise if individuals may change their behavior after the insuranc bought, so that they behave in a more high-risk manner than they did before. In labor markets, ✓ can arise if hiring firms can't tell high-skill job-candidates from low-skill jo candidates. In labor markets, ✓ *Select Answer* moral hazard adverse selection can arise if managers can't observe the effort of workers.
Transcribed Image Text:QUESTION 1 Complete the following sentences: In insurance markets, In insurance markets, can arise if insurers can't tell high-risk customers from low-risk custo ✓ can arise if individuals may change their behavior after the insuranc bought, so that they behave in a more high-risk manner than they did before. In labor markets, ✓ can arise if hiring firms can't tell high-skill job-candidates from low-skill jo candidates. In labor markets, ✓ *Select Answer* moral hazard adverse selection can arise if managers can't observe the effort of workers.
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